As Netflix transitions towards a reporting cadence that omits quarterly subscriber numbers, the focus is on revenue (+15% YoY, to $9.8 billion) and margin (+8ppts YoY, to 30%), which remain buoyant. The company has guided that 2025 revenues will be $43 to $44 billion (+$4 billion YoY), mostly due to subscriber growth

Netflix's advertising-supported tier is dragging its ARPU—however, given its important future growth role, we would expect it to start influencing the direction of the streamer's content slate

Despite its expansion into new genres, Netflix's UK viewing has further narrowed around drama and films: however, live sport, British formats and soaps could move the needle in the future

UK news publishers are experimenting with generative AI to realise newsroom efficiencies. Different businesses see a different balance of risk and reward: some eager locals are already using it for newsgathering and content creation, while quality nationals hold back from reader-facing uses.

Publishers must protect the integrity of their content. Beyond hallucinations, overuse of generative AI carries the longer-term commercial and reputational risk of losing what makes a news product distinctive.

Far less certain is the role of generative AI in delivering the holy grail of higher revenues. New product offerings could be more of an opportunity for businesses that rely on subscribers than those that are ad-supported.

2023 was a challenge for Channel 4: with the advertising market failing to recover after a difficult start, the unpredictability led to an unexpected YoY drop in content expenditure

In 2024, advertising revenue is expected to be flat, which provides a more stable planning base. Recent volatility has tested the broadcaster’s flexibility and proactiveness, above its competitors who are more insulated

To that end, Channel 4’s process of diversifying its business—the difficulties of 2023 show that it needs to be supported in these endeavours if the sector wants a consistent return of benefits

The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face. 

Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.

Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.

Netflix audiences gravitate towards lean-back, family films and comedies, marking a notable contrast with the kinds of TV shows which get the most viewing.

Films and TV are watched differently on Netflix: films draw more repeat viewing, are more of a communal experience and are highly sought after on weekends.

This explains why Netflix—even without a consistent, broad theatrical strategy—invests heavily in film: it brings in a discrete audience and boosts engagement for most viewers.

In the past, broadcast TV and YouTube content has been poles apart—both in substance and the need states they served. This is changing, with the overlap in offerings growing 

We estimate that c.61% of viewing of YouTube Trending content is of videos that could be considered TV-like. Similar programming makes up c.35% of broadcast TV viewing 

YouTube’s videos are also becoming longer, raising audience tolerance and expectations, and allowing the service to compete in a broader range of genres. However, this will be challenged by monetisation limitations

Both subscriber and ARPU growth are showing clear signs that they are topping out. We expect increasing volatility in both metrics moving forward as low-ARPU subscriber additions tug against price hikes and churn-cycling in wealthier regions 

Many of the studios’ streamers are now flirting with profitability thanks to cost-cutting efforts, while cord-cutting only seems to be accelerating 

Almost 50% of streamer sign-ups are opting for the ad-tier. However, it will be some time before ad-tiers become a ‘meaningful’ revenue stream

Sony PlayStation 5 and Microsoft Xbox unit sales crashed in the last quarter, despite promotional discounting. Neither company appears able to reverse a clear consumer shift away from fixed consoles. 

Nintendo Switch outsold Xbox and nearly matched PlayStation sales, even with the Switch 2 set to launch in 2025. 

A radical change in hardware strategy and leadership will be the best solution for Microsoft to demonstrate a growth narrative following its acquisition of Activision. Gamescom this month may provide more clues.

Streaming fell back into the red again, although with further price hikes on the way—along with "modest" Disney+ subscriber growth—next quarter should see the beginning of a profitable trajectory

In the UK, Disney+ continues to grow engagement—if not necessarily subscriptions—however, we still await a boost from local scripted originals

While the performance of Disney's core segments appears to be stabilising, 2024 remains a year of unfinished projects

Meta led the pack of tech results in Q2 with 22% growth and championing a suite of generative AI products; should these falter, Meta can recalibrate by devoting more of its AI infrastructure to core user and ad products. 

AI and the metaverse give Meta an uncertain shot at a new platform play, leveraging its enormous user base and bringing developers back into the fold. 

Reality Labs is still burning cash, but a collaboration with Ray-Ban offers a path to usable head-mounted displays, and could get Meta there faster than Apple’s cutting-edge approach.